In today’s economy, the need to leverage all of an organization’s existing assets to drive sales has never been more critical. Firms of all sizes are looking to make the assets they already have work harder for them – increase the SEO value of the website, use all of the functionality available in software apps, improve the content of email campaigns are just some examples.

One area that, in the past, has been easily overlooked as a prime asset is a firm’s relationships, especially in B2B. Jeremy Galbreath wrote a seminal article in TQM Magazine, “Success in the Relationship Age: building quality relationship assets for market value creation,” that really defined the concept of Enterprise Relationship Management (ERM).

 


"Enterprise Relationship Management is basically a business strategy for value creation that is not based on cost containment, but rather on the leveraging of network-enabled processes and activities to transform the relationships between the organization and all its internal and external constituencies in order to maximize current and future opportunities."

-Galbreath

 

 

Although ERM is not new, organizations have not had the infrastructure or mindset to truly take advantage of their contacts and connections in a meaningful way. Although companies inherently understand the impact relationships have on their business, a systematic process of harnessing their full relationship network for business development and deeper customer engagement is often missing.

ERM automated software solutions seek to maximize the potential of each relationship by showing not only who you know, but how well you know them. Once you’ve uncovered this very qualitative and valuable information, you will start to see the potential business development and client engagement opportunities. Think annual business planning, cross-selling, referrals and event planning and development of new market segments.

The trick is how to convert this newfound information into marketing strategies and tactics. Let’s discuss the six main ways you can achieve higher and more measurable ROI from your marketing and business development efforts.

  1. Expanding the universe of contacts
    The most immediate impact of ERM is the sheer number of relevant contacts you will add to your database. After implementing ContactNet, a leading ERM software solution, international law firm Kilpatrick Townsend developed a database of 1.6 million relationships from across the firm, and this number has been growing 35% annually. In fact, the firm found and signed a new client immediately following implementation.
  2. Opportunity segmenting
    Once additional relationships have been uncovered, you can segment your lists based on almost a limitless number of variables, e.g. regions, subject area, title, and instantly see where the organization has the strongest relationships. This enables the marketing team to determine how they should make their next move. Once a strategy and goals have been established for penetrating a new segment, marketing efforts can be more easily linked to new business opportunities.
  3. Pinpoint marketing
    The ability to segment lists also enables your team to execute targeted marketing campaigns to the right people. For example, Thomson Reuters recently used the information from ContactNet to develop the invitation list for a regional event and was able to increase its campaign reach by adding 20%+ more targeted contacts.
  4. Retention marketing
    Retention marketing programs are aimed at increasing engagement, brand support, and loyalty to your company. Gallup, which has thoroughly studied customer engagement, found that only 13% of B2B customers are fully engaged. And because B2B companies typically have long sales systems that include stakeholders at different levels, it is even more important that they develop a process for regularly monitoring customer relationships so early warning signs are addressed.
    An ERM solution enables managers to view the peaks and troughs in account activity and spot new relationships forming. By observing relationships at this level, they can determine the overall health of an account and ensure that activity is being coordinated across the organization. Keeping existing customers happy is considerably more cost-effective than new customer acquisition.
  5. Insightful lead nurturing
    Simply sending routine marketing materials to every new lead that has been captured in the system is tantamount to creating SPAM. The idea is to match what the contacts need at each stage of the sales cycle in a medium that works best for them. Particularly with more complex sales opportunities, ERM analytics help leads move through the pipeline with more personalized lead nurturing programs.
  6. Higher conversion rates
    Sending firm-wide emails asking if anyone knows a person at X company can only get you so far. That process is inefficient and incomplete. Even CRM systems, which are good at managing company records, often cannot provide the more perceptive details that live in emails, phone calls and social media networks. With these details, plus an analysis of the relationship strength within a company, ERM can help a firm craft customize key selling points and therefore yield higher close rates.

Lisa Gibbs, Global Head of CRM at Thomson Reuters, says “New contacts are interesting because they suggest that the strategy is being effectively implemented. If an organization can identify what particular activities prompted the successful linkage, this information can be fed back to the team in order to replicate and accelerate business development across a larger group of people. Such feedback can help guide a change of strategic emphasis or reinvigorate existing business development efforts.”

The added benefit of using ERM systems is that it allows business development efforts to be measured over time, providing opportunity relationship analysis on a monthly basis in order to assess the speed and volume at which new relationships are being formed. This allows your company to analyze the success or failure of any ongoing business development efforts, and fine-tune its strategy on this basis.

Download the case study to learn how ERM technology has enhanced marketing effectiveness at Thomson Reuters.

by: Patrick Fuller

It’s been more than thirty years since a young Harvard associate professor of Economics published his first Harvard Business Review article, “How Competitive Forces Shape Strategy”. That single article has since led to multiple books and has completely redefined how organizations view and approach competitive strategy. And, as the market for legal services continues to grow in complexity, never before has this simple treatise been more relevant to the legal profession.

The Five Forces consist of the Bargaining Power of Suppliers, the Bargaining Power of Buyers, the Threat of New Entrants, and the Threat of Substitute Products & Services, all which surround the most powerful force, which is the Rivalry Amongst Existing Competitors. In the years since the article was first published, the propensity for all five forces to simultaneously impact the legal profession has not happened, until now.

The first market force is the bargaining power of suppliers. While this means different things to different industries, for the legal profession, supply is all about talent. In the last 3 years, the legal industry has seen a growing surplus of talent, leading to lower cost associates, staff, and contract lawyers, enabling more adaptive firms’ greater opportunities to introduce alternative fee arrangements. This provides greater efficiency and predictability for the client and profitability for the firm. At the same time, the competition for talent amongst lawyers with established books of business has never been stronger, leading to rising lateral recruiting costs and increased risk relative to the portability of client relationships.

The second market force is the bargaining power of buyers, and this is where the greatest power is being leveraged. While many in the industry will rightfully point to the ACC “Value Challenge”, or the increased involvement of procurement departments in the hiring of outside counsel, or just overall price sensitivity, I believe there are two under-the-radar changes which have unleashed a great deal of transformation in the legal profession. First, the increasing number of corporate legal departments which are not outsourcing large amounts of legal work to outside counsel, deciding instead to leverage the oversupply of legal talent in the market to staff their own departments in a much more cost efficient manner. For many firms, this can be a very uncomfortable scenario, when the client is also the competitor. Second, about 5 years ago, many buyers of legal services stopped paying for research charges firms typically passed on to their clients, on top of hourly rates. For many firms, this change immediately resulted in millions of dollars of added cost, making a sudden and intense impact on profitability.

The third market force is the threat of new entrants, and this can be applied in a variety of ways. For the last decade, technology has been leveling the playing field between smaller firms and larger firms, creating an additional layer of competition that also distributes market forces to the rivalry amongst existing competitors. Smaller firms are posing a threat to larger firms largely because the perceived value derived from smaller firms is been seen as equal to, if not greater, than larger firms in the eyes of many buyers. Additionally, an increasing number of international firms are making growth in the U.S. a strategic initiative, which is creating greater complexity in markets and sectors traditionally dominated by U.S.-based firms.

The fourth market force is the threat of substitutes, and like the threat of new entrants, this market force continues to exert increasing leverage in the market. Legal Process Outsourcing (LPO) and the Legal Services Act are the primary drivers of this market force. More and more companies are utilizing LPO as an alternative to both growing their in-house staff and handling work internally, as well as an alternative to some legal work that has traditionally been handled by outside counsel.

The final market force, the hub from which the other market forces extend, is still the most powerful for the legal profession, and that’s the rivalry amongst existing competitors. While the explosion in mergers over recent years has eliminated some historic rivalries, the market forces discussed earlier, specifically the threat of new entrants, the war for lateral talent, and the bargaining powers of buyers, all provide additional complexity to the rivalry amongst existing competitors. Firms continue to compete against each other for existing demand, creating commodity offerings with little differentiation, leading to increased buyer power. Unfortunately for the firms, as more legal work continues to be kept in-house or handled by LPO, the competition amongst firms will continue to intensify.

Moving forward, firms need to combat these five forces to by uncovering, creating, and eventually capturing new demand. The differentiation firms seek to establish may not be in new products, so to speak, but in new service models that create separation from rivals and provide the uncontested market space necessary to limit the impact of Porter’s Five Forces on their operational strategy.

| February 2012 – Nathan Bowie, Thomson Reuters Elite |

The first version of Microsoft Project was released in 1990. Between then and now, many law firm CIOs have variously cajoled, begged and even threatened attorneys to apply even the meanest vestiges of project management tools and methodologies to their practices. Until very recently, these attempts have met with unmitigated failure, especially when it came to adopting new software and business processes.

The reason for this failure is essentially that lawyers want to practice law – period – full stop – end of discussion. Where the CIO could see the value of applying project management principles and processes, attorneys could only see interference with, and interruption of their practices. Besides, as long as clients were willing to pay the going rate, why bother to mess with the status quo?

In my mind, this has always been somewhat of a puzzle. Why? Well, as I see it, the best and most prolific rainmakers – that is, the ones that bring in sizeable, repeat business year after year – already possess and utilize the skills and qualities of excellent project managers.

To restate: consistently successful and profitable lawyers instinctively use the basics of sound project management.

To understand what I am talking about, let’s look at the definition of Legal Project Management as offered by Susan Raridon Lambreth of the LawVision Group (http://lawvisiongroup.com/Susan_Raridon_Lambreth.html). According to Ms. Lambreth, Legal Project Management is:

  • A process for defining, planning, executing and evaluating matters/projects
  • A more proactive, disciplined approach to the management of legal matters which includes application of specific knowledge, skills, tools, and techniques to achieve project objectives
  • Underlying principle: effective communication and setting and meeting of expectations

If we distill Ms. Lambreth’s definition to its basic elements, we come up with the essentials of, Define, Plan, Execute and Evaluate with an emphasis on Communication. Not coincidentally, these attributes are reflected by Phillip Austin, Chief Sales Officer of Nixon Peabody, who defines Legal Project Management similarly in four steps: Define, Plan, Execute/Monitor, and Debrief http://www.nixonpeabody.com/project_management.asp

The challenge for firms today is that somebody has most definitely been messing with the status quo, and that somebody is personified in the financial crisis of 2008, and the subsequent economic turmoil we continue to suffer. Clients are definitely NOT willing to “pay the going rate,” at least not without a full understanding of everything that is involved and a realistic expectation of the value they will receive. Matter budgets are expected up front, and be they based on hourly billing, fixed or alternative fee arrangements, law firms are being held accountable for meeting expectations and sticking to those budgets. And, while some attorneys do this instinctively, it is of utmost importance to take these concepts, and to create tools and processes that can be applied somewhat uniformly across all of a firm’s practices.

What this all boils down to is that in order to win work, lawyers are increasingly put in the position of having to define the parameters of a particular matter, plan them out in increasingly minute detail, and create accurate budgets. Once the work is sold, lawyers have to execute according to the plan, achieve desired results within the budget, and communicate status regularly to the client as the matter progresses.

At the risk of beating a dead horse, I’d point out that key words in the preceding paragraph are define, plan, execute and communicate. In other words, good lawyering equals good legal project management.

It’s no wonder then that today we are seeing attorneys coming to the CIO with requests for tools and training in project management that is specific to the unique needs of the attorney and the law firm. At last, project management for the legal profession has come full circle.

Yesterday, the West Legal Ed Center and Hildebrandt kicked off their 19th Annual Marketing Partner Forum. Before the event started, we had the opportunity to attend the pre-conference workshop ‘Building Reporting: Marketing and Business Development Metrics’.

Panellists started off the session by discussing the evolution of ROI marketing within the legal industry from the 1980s and how it has progressed. Although there are numerous metrics to report on, there are 10 key characteristics to take into consideration when identifying the ideal metric:

  1. Relevant: addresses specific pending action
  2. Predictive: accurately predicts outcome of pending action
  3. Objective: not subject to personal interpretation
  4. Calibrated: the same across conditions & cultures
  5. Reliable: dependable & stable over time
  6. Sensitive: identifies meaningful differences in outcomes
  7. Simple: uncomplicated meaning & implications clear
  8. Causal: course of action leads to improvement
  9. Transparent: subject to independent audit
  10. Quality assured: formal/on-going process to assure 1-9

Once the ideal metric is found, a process can be put into place. The first step is to choose the appropriate tool (software) that will help the department with reporting. Secondly, come up with the process for retrieving the information then install and test it. Finally, once a good structure is put in place, analyze the data to make decisions and evaluate your ROI.

The most beneficial thing for marketing and business development departments to do is align their measurement and reporting to the activities that are most objectively and closely tied to the financial performance of the firm. This benefits the department by:

  • Enhancing credibility
  • Improving the effectiveness & efficiency of activities
  • Guiding continuous improvement over time
  • Enabling the department to move from discretionary business expenses to more strategic investments

At the end of the day, clients are measuring their law firms on quality, cost, service, speed, and innovation. Marketing and business development departments should also be holding themselves against these same standards. By holding these standards firms can then better understand rates, have insight into the expertise that attracts premiums, identify how to differentiate firm value, and create a more informed service delivery model that meets their clients’ needs.

Whether you’re using Chatter, Yammer, Jive, or something else, chances are you have at least one option for collaborating with your colleagues via an enterprise social network. That’s because, as Mark Benioff pointed out in this year’s Dreamforce keynote, 70% of all companies are now using social technology to help them run their businesses.
That’s an incredible percentage. But for as many companies as there are using social technology today, only a handful (3%) are actually getting the maximum benefit from these tools. Meanwhile, the vast majority of companies (78%) are struggling to find any benefit in these solutions, according to a recent McKinsey quarterly report.

InsightsFromDreamforce2012

So, how can companies that are struggling to get their enterprise social network off the ground begin to reap the benefits of the connected enterprise? That’s a question we spent a lot of time talking to clients about at Dreamforce.

Step 1: Realize that your company is already social

Businesses are inherently social. Every day employees engage in dialogs with one another, with customers, and with the rest of the external world. Bill sends an email to a prospect with the pricing information they requested. Carol calls one of your suppliers to check on an order’s status. Sheila flies to New York to discuss a new product launch with your biggest client. These are the social interactions that take place on a daily basis within your company. The goal of a social technology like Chatter isn’t to replace these conversations, it’s simply to bring them together in a way that creates new conversations and sparks new connections.

Step 2: Understand the conversations that are happening today

By understanding who Bill is emailing, who Carol is talking to, or who Sheila is meeting with, you can begin connecting the dots between these conversations. For example, you could let Bill know that one of your field reps emailed the same prospect just last week about another product. Better yet, you could tell Bill that his prospect happens to be one of your company’s biggest suppliers; the same one Carol called earlier today. These are the types of connections that create real value for your business. They are the types of connection that tools like ContactNet can capture today.

Step 3: Use these conversations to supercharge your social network

What if all of these conversations could automatically be pushed into a tool like Chatter? That is exactly the question we’re asking today at ContactNet. We want to help you take what’s already happening in your organization and use that knowledge to make your conversations more social. Imagine being able to suggest that two users connect because they’ve emailed the same client or have the same contact in their address books. Imagine letting one of your sales reps know that three of her co-workers were talking to that prospect she’s been targeting. Now imagine all of that being done automatically.

Whether you’re struggling to find your way with tools like Chatter or you’ve got it all figured out, the fact is that people spend only five percent of their time communicating via social networks, according to the McKinsey report. So, by understanding the broader picture of the way your organization is communicating, you can greatly amplify the benefits of your social technology investment.

| January 2012 – Nathan Bowie, Thomson Reuters Elite |

Lawyers as Project Management Professionals: Who Owns Legal Project Management and What Training/Certification Do They Need…

I’ve just had the opportunity to moderate two panel discussions on Legal Project Management here at LegalTech. In both cases, I was very fortunate to have such personable and knowledgeable panelists, and I’d like to take a moment to thank them publicly.

On Monday, January 30, Colleen Nihill, Firm Wide Director of Project Management at Dechert, and Curt Selman, Director of Finance at Martin Clearwater & Bell joined me in the Leveraging Legal Technology track on the subject of Profitability through Legal Project Management. The following day, Jay Nogle, Chief Information Officer of Greenberg Traurig and Thomas Wisinski, Chief Knowledge Officer of Haynes and Boone helped the attendees at the CIO / CTO Forum navigate the ins and outs of Legal Project Management.

Their perspectives and their firm’s varied approaches to LPM made for two lively and informative discussions that I hope were as valuable to the audiences as they were to me. Thank you all very, very much.

Although the subject of each session was different, there were some common themes. Two that resonated with me (and I hope with the attendees) were: 1) who within the law firm owns the LPM process, and 2) will attorneys become project managers?

To answer the first, we need look no further than the titles of the four panelists: Director of Project Management; Director of Finance; Chief Information Officer; and Chief Knowledge Officer. It is clear that each firm has to decide where LPM will live, and who will drive it. In some firms, entire departments are being created that focus entirely on managing legal matters to achieve project management and financial goals. In other firms, the Finance department takes the lead working with attorneys to bring in their matters on time and on budget. At still other firms, IT is seen as the natural repository for hosting the tools and processes that make up LPM. After all, IT has been using project management in one form or another for years for their own initiatives. Lastly, one of the key benefits of LPM is that it helps the firm develop skills to gather valuable data and improves processes over time. This can be seen as the natural province of the Knowledge Manager.

To add to the subject, some firms are hiring dedicated practice managers who are charged with assisting attorneys in setting matter budgets and managing their matters and resources to achieve success. Finally, there are many firms where individual attorneys and practice group leaders are driving the move to Legal Project Management. After all, they are the ones on the front lines dealing with clients, and most directly feel the pressure to accurately price matters and manage to a budget.

The lawyer then becomes the one constant regardless of whether they manage the matter themselves, or whether they are managed as part of a process. If the lawyers do not fully buy in, Legal Project Management cannot succeed.

Which leads us to the second question: will attorneys become project managers? More specifically, one audience member asked if attorneys will actually seek Project Management Professional (PMP) certification from the Project Management Institute.

As an acquaintance of mine was quick to point out, no self-respecting lawyer is going to put letters after his name that resemble the word pimp. John Q, Smith, Esq., PIMP just isn’t going to happen any time soon.

All levity aside, that may change, and it may change sooner than many of us are willing to believe. As Colleen Nihill pointed out, Dechert is already developing internal programs to train attorneys in the basics of project management. A small, but growing number of consultants such as the LawVision Group are providing boot camps and project management training for law firms and other professional service organizations. In fact the Project Management Institute itself has created a working group called the PMI Legal Project Management Community of Practice. Perhaps it won’t be long until the PMI offers a specialty certification in Legal Project Management for attorneys and other practitioners.

Ultimately, as Jay Nogle observed, the market will drive any move toward attorneys seeking formal certification in Legal Project Management. If clients see value, and more importantly, if RFPs begin to require that certain members of matter teams be LPM certified, you can bet that lawyers will line up in droves for the right to put the appropriate series of letters after their names.